A man in Southern California was sentenced to 11 years and 3 months in prison for paycheck protection program (PPP) loan fraud, the US Justice Department said in a statement.
Californian man convicted of PPP loan fraud
Encino’s 53-year-old Robert Benlevi was convicted of bank fraud in March, made false statements to financial institutions, made money laundering, and was sentenced to 135 months in prison. Benlevi was accused of submitting 27 PPP loan applications to four banks between April and June 2020 on behalf of eight Benlevi-owned companies.
According to court documents, Ben Levi has applied for a total of $ 27 million repayable PPP loan guaranteed by the Small Business Administration (SBA) under the CARES (Corona Virus Assistance, Relief, and Financial Security) Act. did.
Ben Levi demanded $ 27 million to cover his costs and received $ 3 million he spent on his personal expenses. This includes withdrawing cash, paying by credit card, and sending money to other personal or business accounts you manage. According to the Justice Department, he also rented an oceanfront apartment in Santa Monica.
Benlevi claimed through fraudulent applications that each company had 100 employees and an average salary of $ 400,000, but in reality the company had no employees or salaries.
Prosecution evidence also showed that Ben Levi also submitted a false IRS document that falsely stated that each company’s annual salary was $ 4.8 million. According to Benlevi’s fraudulent loan application, Benlevi’s three companies: 1Stellar Health LLC, Bestways2 Health LLC and Joyous-Health4ULLC have secured a total of $ 3 million in PPP funding.
Crackdown on PPP scammers
The US government has approved over $ 600 billion in permissible loans to SMEs through PPP. The loan was for employment retention and other costs across three short cycles from April 2020 to May 2021. If a company spends 60% on salary and pays interest on mortgages, rent and utilities, the loan is fully acceptable. However, some companies have attempted to illegally obtain and use money for purposes that are not part of the program.
PPP fraud is often misrepresented, “loan stacking” by applying for PPP loans from multiple lenders, use of loan revenue for improper or unauthorized purposes, or during PPP loan audits or fraud investigations. It is violated by making false statements.
More than 15% of PPP loans, or about 1.8 million of the 11.8 million PPP loans, have at least some evidence of potential fraud, according to a recent study from the University of Texas at Austin (Ministry of Finance). rice field.
Investigators also estimate that $ 76 billion of PPP loans were illegally made, which is about 10% of the program’s budget. FinTech lenders had the highest percentage of suspected PPP loans. They made about 29% of all PPP loans, but accounted for more than half of all suspicious loans to borrowers.
COVID-19 Fraud Execution Task Force
In an attempt to crack down on PPP fraud, the Attorney General established the COVID-19 Anti-Scam Task Force in May 2021. The goal is to collaborate with other federal agencies to gather Justice Department resources and step up efforts to combat and prevent pandemic-related fraud.
At the end of last year, a secret service investigation into unemployment insurance and salary protection program (PPP) loan fraud resulted in the seizure of more than $ 1.2 billion and the recovery of more than $ 2.3 billion in fraudulently acquired funds and the unemployment insurance program. ..
If you have information about fraudulent attempts related to COVID-19 aid, you can call the Department of Justice’s National Disaster Medical Center (NCDF) hotline (866-720-5721) or report it using the reporting form. https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form
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Details: PPP loan